A FHSA is a government registered plan that allows a prospective first-time home buyer, to save for their first home tax-free. It reduces the individual’s income taxes as the contribution amount reduces taxable income on their tax return. A FHSA is a complementary product to a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), by allowing for additional savings, specific for a first home.

To open a FHSA, you must be a resident of Canada and at least 19 years of age, which is the age of majority in Nova Scotia. You also need to be a first-time home buyer. This means that you (or your spouse or common-law partner) have not owned a qualifying home, or lived in one as a principal residence, at any time in the five calendar years leading up to opening the FHSA.

You can contribute $8,000 each year, plus any unused contribution room from previous years. The lifetime amount you can contribute to the FHSA is $40,000.

Yes, you can have more than one FHSA. However, the total of all your FHSAs must stay within the annual and lifetime limits. You are also able to make tax-free transfers between your various FHSA accounts.

There isn't a spousal option for the FHSA and the only person who can contribute to a FHSA is the owner of the account.

You can make a tax-free withdrawal from your FHSA with the following steps:

1. Ensure you are a resident of Canada at the time you withdraw your money to acquire your qualifying home, and that you meet the parameters of being a first-time home buyer.
2. Have a signed agreement in place to buy or build a qualifying home before October 1 of the year following your date of withdrawal.
3. Make the withdrawal by completing CRA form RC725. This sets out your qualifying home’s location that you intend to occupy as your main residence within one year of acquiring it.
4. Ensure you don’t acquire the qualifying home more than 30 days before the withdrawal date.
5. You must occupy or intent to occupy the qualifying home as your principal place of residence within one year after buying or building it.

Yes. There is a maximum participation period that an FHSA can remain open. It begins on the opening date of your FHSA, and ends on December 31 of the year in which the earliest of the following occurs:

1. The year you turn 71.
2. The 15th anniversary of the account opening.
3. The year after you make your first qualifying withdrawal.

To avoid penalties after the maximum participation period, you can directly transfer, on a tax-deferred basis, any savings not used to purchase your home into a RRSP or Registered Retirement Income Fund (RRIF), without requiring or using RRSP contribution room.

If you made a qualifying withdrawal to buy a home, you can directly transfer any unused funds, on a tax-deferred basis, into a RRSP or RRIF without requiring or using RRSP contribution room. This must be completed before the end of the maximum participation period. You can also withdraw these unused funds but these funds will be taxable on your income tax return.

If you don’t buy a home, any unused savings in your FHSA can be transferred to an RRSP or an RRIF. It can also be withdrawn and reported as income, but you will be required to pay income taxes on this amount.

No, the HBP continues to exist. You can use both the HBP and the FHSA on the same qualifying first home purchase. Unlike the HBP, you don’t need to pay back any FHSA funds used to buy a home. With up to $40,000 in the FHSA and up to $35,000 through the HBP, you could have upwards of $75,000, plus interest within the FHSA, towards your first home purchase.